Accounting Test 3
Common Fixed Expenses ______.
include expenses that cannot be traced to the profit center
Benchmarking ______.
may help a manager motivate employees and provide a measure to evaluate performance
The fixed Overhead budget variance _______.
measures the differences between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.
Operating Income/Total assets is the computation for ______.
return on investment
Standard Quantity of DL X Standard Price of DL is the calculation to compute ______.
standard cost of DL
Standard quantity of direct labor X standard price of direct labor is the calculation to compute____.
standard cost of DL
Capital Turnover ______.
focuses on how efficiently the division uses its assets to generate sales revenue
The Master Budget ______.
is the comprehensive planning document for the entire organization
Segment Margin ______.
is the operating income generated by a profit or investment center before subtracting common fixed costs that have been allocated to the center
Which of the following is a disadvantage of using the negotiated price strategy to determine the transfer price?
it takes time and effort
Each of the following includes advantage of standard costs EXCEPT ______.
lack of timeliness
Which of the following is the formula to compute the DL efficiency variance?
standard rate X (actual hours - standard hours allowed)
Which of the following best describes an advantage of a costing system that occurs when a manager provides an employee with a reasonable or attainable goal?
Motivation
Computer world wants to increase their current return on investment (ROI). What action should the managerial accounting take to increase the current ROI?
Operating Expense Reduction
Which of the following is true about organization wide performance reports?
Operating income from each profit center flows into the performance report for an investment center
Which of the following represents the order and flow of manufaturing cost through the inventory accounts.
Raw Materials; Work in Process; Finished Goods; COGS
Which of the following journal entries represents the recording of the sale and release of inventory in a periodic system?
a debit to accounts receivable and a credit to Sales Revenue
Which of the following answers describes the benefits of the financial budget?
a manager who uses this budget can compile the capital expenditure budget, the cash budget, and the budgeted balance sheet.
Which of the following is TRUE about credit card sales and budgets?
a sale is shown on the sales budget, in the same month as the sale
Which of the following is the calculation to compute the variable manufacturing overhead rate variance
actual hours X (actual rate - standard)
Which of the following is the calculation to compute the DM price variance?
actual quantity purchased X (actual price - standard Price)
Which of the following budgets is the comprehensive planning document for the entire organization?
Master Budget
_______ compares actual revenues and expenses against budgeted figures.
A performance report
Which of the following is a characteristic of an effective performance evaluation system?
Benchmarks that promote goal congruence and coordination amongst segments
A merchandising company uses a master budget which includes all of the except a(n) ______.
DL budget
The _____ merges the budgeted cash collections and cash payments to projects.
Combined Cash Budget
Which of the following is NOT a component of the DL Budget?
Cost of Goods Sold
Which of the following is NOT a component of the combined cash budget?
Depreciation as a cash expense
______ include(s) those fixed expenses that can be traced to a profit center.
Direct Fixed Expenses
The ____ perspective of the balanced scorecard focuses on incorporating innovation, operations, and post sales support.
Internal Business
Safety Stock is _______.
Inventory kept on hand to account for increases in consumer demand .
Which of the following is TRUE about a responsibility center?
Lower-Level managers reports to Higher-Level managers who have broader responsibilities
Which of the following is NOT an advantage of decentralization?
Potential duplication of costs
Operating Income/Sales is a definition of ____.
Sales Margin
Expected Number of Unit Sales X Expected Sales Price per unit = Expected Total Sales Revenue is the computation for ______.
Sales Revenue
Which of the following is the calculation to compute the standard cost of direct labor?
Standard Quantity of DL X Standard Price of DL
_______ entails the planning and establishment of long-term goals which range years into the future.
Strategic Planning
Which of the following represents the formula to compute the total units to produce in the production budget?
Units needed for sales and desired ending inventory - units in beginning inventory
Total estimated variable MOH / Total estimated amount of the allocation base is the calculation to compare the _______.
Variable MOH rate
Which of the following is NOT a positive attribute of budgeting?
a budget should never force a manager to plan; promote coordination and communication; or provide a benchmark for motivating employees and evaluating actual performance.
Which of the following budgets reveal a managers intent to invest in new property, plant, or equipment?
capital expenditure budget
The learning and growth perspective of the balanced scorecard focuses on _______.
employees capabilities, information system capabilities, and the company climate for action
The variable overhead rate variance rate ______.
is the difference between the actual variable manufacturing overhead costs incurred during the period and the amount of variable MOH expected, considering the number of actual hours worked
Which of the following is important to a manager at a merchandising company when preparing the master budget?
length of time between sales and deposits
A _____ is a lending tool the company can use to draw money as needed at a specified rate of interest, for a special amount of time, paying on the actual amount owed instead of a closed-end note.
line of credit
Which of the following is NOT a benefit to a merchant who accepts credit and debit card transactions?
the acceptance of credit cards slows the cash flows
The characteristics of a retail credit card include each of the following except _____.
the card issuer assumes the credit risk
_______ refers to the concept that a manager will only investigate budget variances that are relatively large
the management by exception technique
Motivation is an advantage of standard costing which occurs when _____.
the manager provides an employee with a reasonable or attainable goal
Which of the following is TRUE about a service company?
the operating budget of a service company has no merchandising inventory
Which of the following is NOT important to a manager at a merchandising company when preparing the master budget?
the production budget
Which of the following is not important to a manager at a merchandising company when preparing the master budget?
the production budget
The unintended behavioral consequence, a disadvantage of standard costing, occurs when _____.
the production manager purchases a large quantity of raw materials which results in the production manager overproducing to obtain a favorable fixed overhead variance
Actual or prior year budgeted data is ____.
the starting point for creating the budget
Which of the following is NOT true about the variable overhead rate variance?
the variable overhead rate variance is directly tied to the efficiency with which the machine hours are used instead of the variable overhead rate variance
Which of the following is the calculation to compute the predetermined variable manufacturing overhead rate?
total estimated variable MOH / total estimated amount of the allocation base
Which of the following is NOT an outcome of the combined cash budget?
total liabilities and stockholders equity
The formula to compute the direct labor budget is ____.
units to be produced X DL per unit X DL cost per hour = Total direct labor cost.
